Yeah the height restrictions can sometimes be really stupid.... like once we were in Queensland and my sister was about 7 at the time (but she is a bit short for her age) so she couldn't get on a few of the rides.... however once we saw this huge baby (they were wearing a diaper) get on a ride that my seven year old sister couldn't get on because of the height (and she was only just below the line, like a centimetre!) This giant baby was walking like babies walk and everything.... and it was a waterslide thing, if the kid fell out or anything happened, I highly doubt they would have been able to swim. Plus, they wouldn't have the same developed sense of "hold on" or "don't stick your arms out the side of the ride" which is also a safety factor.
Funnily enough we went back to the ride two hours later and my sister was allowed on.... she must have had a growth spurt.
I don't know what they had in the case at Disneyworld, but they should really have advisory signs telling people how scary the ride is, and how suitable it is for kids... because the height thing doesn't really tell people how scary it will be, and sometimes you can't see what the ride is like from the outside. I remember my brother and I went on a ride once when we were young kids and we were so so scared.... not fun scared, but absolutely shit scared because we didn't realize what the ride would be like.
But it is really sad for the family... there may have been something wrong health wise with the kid though. How sad.